CapitalSource Inc. (CSE) announced Tuesday that its second quarter profit declined from last year, hurt by a decline in average asset balance, resulting from the sale of Agency MBS and the decrease in commercial loan balance.
The company's net income on a GAAP basis was $60.1 million or $0.25 per share, down from $84.3 million or $0.45 per share in the prior year quarter.
Excluding certain items, adjusted earnings would have been $29.1 million or $0.12 per share, compared to $128.4 million or $0.68 per share in the year-ago quarter. On average, twelve analysts polled by First Call/Thomson Financial expected the company to earn $0.23 per share for the second quarter.
Lower adjusted earnings for the quarter was attributed primarily to an increase in income taxes, an increase in charge-offs and realized losses on derivatives.
Net investment income for the quarter declined to $159.6 million from $178.1 million in the previous year quarter. Total other income rose to $40.3 million from $21.1 million in the year-ago quarter.
Provision for loan losses for the quarter was $31.7 million, up from $17.4 million in the prior year quarter. Loan loss allowance at June 30, 2008 was $141.1 million, compared to $127.5 million at June 30, 2007.
In addition, the company said paid a regular quarterly cash dividend of $0.60 per share on June 30 to common shareholders of record on June 16.
For the first half of 2008, net income fell to $66.8 million or $0.29 per share from $163.0 million or $0.88 per share in the previous year period. On adjusted basis, earnings would have been $142.4 million or $0.62 per share, compared to $242.7 million or $1.31 per share in the year-ago period.
Net investment income fell to $340.3 million from $351.3 million in the prior year period. The company incurred total other expense of $56.1 million, compared to other income of $27.1 million in the preceding year period.
CSE is currently trading at $11.20, up 2 cents.
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